The Code of Capital: How the Law Creates Wealth and Inequality
For centuries, private attorneys have molded and adapted these legal modules to a changing roster of assets and have thereby enhanced their clients’ wealth. And states have supported the coding of capital by offering their coercive law powers to enforce the legal rights that have been bestowed on capital.
Katharina Pistor • The Code of Capital: How the Law Creates Wealth and Inequality
Everywhere we probed a little deeper, we found the core institutions of private law: contract, property, collateral, trust, corporate, and bankruptcy law.
Katharina Pistor • The Code of Capital: How the Law Creates Wealth and Inequality
They can code capital as they choose in domestic or foreign law by opting into another country’s contract law, or by incorporating their business in a jurisdiction that offers them the greatest benefits in the form of tax rates, regulatory relief, or shareholder benefits. Opting out of one and into a different legal regime leaves only a paper or
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Many legal scholars have already drawn attention to the fact that the operation of the market hinges on legal institutions that facilitate price discovery.
Katharina Pistor • The Code of Capital: How the Law Creates Wealth and Inequality
Two legal systems dominate the world of global capital: English common law and the laws of New York State.
Katharina Pistor • The Code of Capital: How the Law Creates Wealth and Inequality
Recognizing that capital is made, and not simply the product of superior skills, shifts attention to the processes by which different assets are slated for legal coding and to the states that endorse relevant legal modules and offer their coercive powers to enforce them.
Katharina Pistor • The Code of Capital: How the Law Creates Wealth and Inequality
The most important ones are contract law, property rights, collateral law, trust, corporate, and bankruptcy law. These are the modules from which capital is coded. They bestow important attributes on assets and thereby privilege its holder: Priority, which ranks competing claims to the same assets; durability, which extends priority claims in time;
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Realizing the centrality and power of law for coding capital has important implications for understanding the political economy of capitalism.
Katharina Pistor • The Code of Capital: How the Law Creates Wealth and Inequality
The wealthy often claim special skills, hard work, and the personal sacrifice they themselves or their parents or forefathers have made as justifications for the wealth they hold today. These factors may well have contributed to their fortunes. Yet, without legal coding, most of these fortunes would have been short-lived. Accumulating wealth over
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